Wednesday, July 23, 2014

Dalrymple on the Capacity of the Poor

Here is a brief video clip from Poverty Cure featuring one of my favorite writers, Theodore Dalrymple. He is the author of a tremendous book, Life at the Bottom: The Worldview That Makes the Underclass. It is an outstanding picture of the ideologies, values, and behavioral habits of those in poverty Dalrymple came across in his vocation as a prison doctor and psychiatrist.

In the video above, Dalrymple urges those of us who are eager to help those in poverty to raise the questions,
"Why are these people uniquely unable to get out of their poverty? Is there not evidence, in fact, that when given the opportunity, they do in fact get out of poverty themselves?

Monday, July 21, 2014

Economic Freedom in the Early American Tradition

A video of my recent Founders Lecture, "Economic Freedom in the Early American Tradition" is now available at the Center for Vision and Values. You can watch the video by clicking here. Paul Kengor, Executive Director of the Center gave me a very (if not too) kind introduction and my remarks begin at the 4:25 mark of the video.

Note: I make at least one historical error. I say in the lecture that Samuel Willard's A Compleat Body of Divinity was published in 1606. In fact, Willard died in 1706 and his book was published posthumously in 1726.

Wednesday, July 16, 2014

Civics Summitt 2014

This weekend I will have the pleasure at lecturing at the Institute for Principle Studies' Civics Summit in Modesto, California. This year the summit will take a look back at the 50 years War on Poverty. I will be joined by Mike Winther, president of the Institute, and Mike Miller, a research fellow at the Acton Institute.

I will be lecturing on the following:

  • The Biblical View of Man and Economic Law
  • The Economics of Income Transfers and the War on Poverty
  • The History of the War on Poverty
  • Fulfilling the Cultural Mandate
A fun time shall be had by all.

To hear more about it click here.

To register click here.

Saturday, July 5, 2014

Foundations of Economics Recommended by Bigger Pie Forum

I am pleased to note that my book, Foundations of Economics, is among pretty lofty company in the Bigger Pie Forum's recommended book list. Bigger Pie Forum is a non-profit, non-partisan educational organization devoted to researching and communicating ideas promoting economic freedom, exposing cronyism, and helping  Mississippi’s economy grow.

Friday, July 4, 2014

The Founding Fathers Were Entrepreneurs

Following up on yesterday's post, it is appropriate to point you to a post by Bill Murphy, Jr. documenting that most of the signers of the Declaration of Independence were entrepreneurs. By this Murphy means they were in business for themselves. They undertook production of various sorts with their own property, bearing the risk of failure. Murphy draws upon Charles Goodrich's, Lives of the Signers of the Declaration of Independence, originally published in 1829.

Thursday, July 3, 2014

Why Entrepreneurship Is Essential for Economic Development

Since our banishment from the Garden of Eden, man has faced a central cultural dilemma: how do we fulfill God’s creation mandate in a world of aggravated scarcity without either starving to death or killing one another?

This is not at all a moot point.

Whether they know it or not, different societies seek to answer this question with every change of economic institutions and policies. History is full of stark examples revealing that different attempts to solve our dilemma have resulted in widely different consequences.

Key Components of Economic Development

Economic theory rooted in an understanding of man as a purposeful actor created in God’s image teaches that to materially fulfill God’s cultural mandate, we must take advantage of the division of labor, capital accumulation, and entrepreneurship.
  • Division of labor opens the door to increased productivity by allowing people to specialize at lines of production where they are most efficient.
  • Capital formation also contributes to economic progress by increasing the productivity of the user. Likewise, with more capital investment comes better technology that will further increase productivity.
In order for economic progress to continue over time, however, it is important not to waste capital that has already been accumulated. This is why entrepreneurship is the third major contributor to economic development. 

Monday, June 23, 2014

Economics after 2008

What to make of Robert Skildelsky's call for reform of the economics curriculum?

Skidelsky is correct to note that the economics profession needs reform. By the summer 2009 various economists and journalists such as Paul Krugman, the editors of Economist magazine and Paul de Grauwe were both noting the limitations of standard economic models and calling for modifying the analysis so as to allow for more reality. Indeed I was cautiously optimistic that the 2008 meltdown and its aftermath would foster a major reevaluation and reorienting of modern economics. It seems, however, that many are learning all the wrong lessons.

Most would-be reformers quickly turned to behavioral economics as a way to incorporate more reality into economic analysis. Unfortunately, this amounts to little more than asserting that emotions impact human behavior and transforms economic science into something more resembling applied psychology. While no one should doubt the importance of emotions on the actions of people, it is not clear that such recognition fundamentally alters sound economic analysis. This was noticed decades ago by Ludwig von Mises:

Many champions of the instinct school are convinced that they have proved that action is not determined by reason, but stems from the profound depths of innate forces, impulses, instincts, and dispositions which are not open to any rational elucidation. They are certain they have succeeded in exposing the shallowness of rationaIisrn and disparage economics as "a tissue of false conc1usions drawn from false psychological assumptions."

Yet rationalism, praxeology, and economics do not deal with the ultimate springs and goals of action, but with the means applied for the attainment of an end sought. However unfathomable the depths may be from which an impulse or instinct emerges, the means which man chooses for its satisfaction are determined by a rational consideration of expense and success.

He who acts under an emotional impulse also acts. What distinguishes an emotional action from other actions is the valuation of input and output. Emotions disarrange valuations. Inflamed with passion man sees the goal as more desirable and the price he has to pay for it as less burdensome than he would in cool deliberation. Men have never doubted that even in the state of emotion means and ends are pondered and that it is possible to influence the outcome of this deliberation by rendering more costly the yielding to the passionatc impulse (Human Action, pp. 15-16).
Sound economic analysis already recognized that our emotions affect our behavior, however, the fact remains that all of our action is purposeful behavior. Economics is an implication of that fact that people act with purpose, regardless of the proximate source of that purpose. Sound economics is not dependent upon why people act as they do, only that they act.

There are further issues with Skidelsky's assertions, but they are matters for another day.